NEW DELHI: The recent measures to tighten goldimports have ended up creating a severe supply crunch for traders , prompting ministries to review the norms.

Industry sources told TOI that gems and jewellery exporters are feeling the pinch as some banks have virtually stopped imports, while others supply with a lag. Besides, the import curbs have prompted banks through which shipments have to be routed to raise service charges, adding to the burden. Last week, amid a volley of protests at a meeting with trade bodies, commerce & industry minister Anand Sharma promised there would be no shortage of gold and instructed his officials to ensure that public sector MMTC fills the void created by banks that have substantially cut down imports.

"Since you are only doing 20% or 30% of the business and the fixed costs remain the same, it is spread over a smaller group. We have sought some relief from the government as exports are becoming uncompetitive," said Pankaj Parekh, vice-chairman of the Gems & Jewellery Export Promotion Council.

Although there was a spurt in gold imports in April and May after a fall in prices in the international markets, it is estimated to have declined in June, although official data is yet to be released. Initial estimates suggest that imports may be down to around $2.5 billion in June, compared to $8.4 billion in May and $7.5 billion in April.

The fall in shipments is in line with the government's estimates and may prompt a rethink, especially when the current account deficit appears more manageable at 3.6% of GDP in the March quarter, compared to a record 6.7% in the previous threemonth period.

In an attempt to keep the current account deficit under check, the government and the Reserve Bank of India had taken several measures to curb the import of the yellow metal. Compared to the peak price of $1,600 an ounce, gold is hovering around the $1,200-1 ,250 level . In India, prices have decreased from a peak of over Rs 32,000 per 10 gram to Rs 26,830 here on Friday. In Mumbai, the yellow metal closed at Rs 26,190 per 10 gram.